We are all consumers. We all go shopping, be it for sporting goods, groceries, clothing, or soap. Traditionally, consumers purchase goods by physically going to a store and paying for the goods by cash, check or credit card. Traditionally, retailers obtain their goods from distributors (also known as wholesalers), and distributors obtain their goods from the manufacturer, as shown in FIG. 1. Likewise, when goods are sold by a retailer, the retailer receives payment from the consumer and then remits a sum to the distributor who, in turn, remits a sum to the manufacturer, also shown in FIG. 1. Sometimes the distributing wing of a manufacturer sells goods directly to the retailer. Larger retailers may also obtain goods directly from the manufacturer.
With the advent of the world wide web on the internet, many consumers are now making purchases on-line in the comfort of their home through virtual stores and storefronts rather than venturing out to traditional bricks and mortar stores. When a consumer wants to purchase a good on-line, the consumer typically directs a computer's web browser (such as Netscape Communicator® available from Netscape Communications Corporation, Mountain View, Calif.) to the web site of a manufacturer or a large retailer, as shown in FIG. 2. If the consumer makes an on-line purchase from a manufacturer, the retailer and distributor are left out of the transaction. That is, in the present model of e-commerce, both the retailer and distributor are left out of on-line sales and effectively lose profits from the sales to which they are not a party. The manufacturer's on-line presence takes customers out of the physical store of independent retailers and decreases the sales volume of and, thus, the profits of independent retailers. When a manufacturer maintains its own web site and sells its products directly consumers, independent retailers have responded by dropping the manufacturer's line of products because the independent retailer does not want to compete with and lose business to the manufacturer's web site.
Independent retailers have difficulty competing with manufacturer's web sites as independent retailers cannot provide the same breadth of selection as a manufacturer. Independent retailers have limited resources and can only stock a portion of a manufacturer's product line due to storage and monetary constraints. Independent retailers cannot afford to obtain a full line of a manufacturer's products and do not have the physical space to store a full line of a manufacturer's products.
Moreover, both large retailers and manufacturers have greater resources than smaller independent retailers. These large retailers and manufacturers can afford to invest in complex web sites that include a consumer-friendly on-line sales component. Creating a rudimentary web site is simple, but preparing a professional web site to sell goods and process orders is a large undertaking, one that most small retailers cannot monetarily afford. Even if independent retailers can or do create their own web storefronts, the result is that the independent retailers are competing over the internet with the sales component of the manufacturer's web site.
What is needed is a method of doing business on the internet by which the manufacturer can maintain an on-line presence without bypassing and without alienating the retailer and the distributor such that the manufacturer, distributor and independent retailer all share in the profits of on-line sales.